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The Pentagon said Iran War costs $29 billion, but the real cost is closer to $200 billion—and counting

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After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup

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Now worth $200 million, Sarah Jessica Parker credits being ‘one of eight kids that struggled financially’ for her hunger, ambition, and work ethic
Techtoshiba

Toshiba Chairman Steps Down Over Huge Nuclear Business Writedown

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Reuters
Reuters
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Michelle Toh
Michelle Toh
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By
Reuters
Reuters
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Michelle Toh
Michelle Toh
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February 14, 2017, 2:47 AM ET
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After a day of delays and confusion, Japan’s Toshiba said on Tuesday it expected to book a $6.3 billion hit to its U.S. nuclear unit, a writedown that wipes out its shareholder equity and will drag the group to a full-year loss.

Hours earlier on Tuesday, the battered conglomerate rattled investors by failing to release its earnings on schedule, saying initially it was ‘not ready’ and then announcing later it needed more time to probe its Westinghouse nuclear business after internal reports uncovered potential problems.

The figures eventually released were numbers that have yet to be approved by its auditor and Toshiba cautioned investors that a major revision was possible. Fully audited numbers are now not due till March 14 after the firm was granted a reprieve for its formal filing by Japanese regulators.

Toshiba (TOSBF) also said in a statement it could push harder to raise capital, including selling a majority stake in its memory chip arm. Previously, it had sought to sell just under 20% of its prize business.

“Finally now people are starting to recognize that internal control problems, the accounting issues and governance issues are very real and no longer abstract,” said Zuhair Khan, an analyst at Jefferies in Tokyo.

“They impact the viability of the company.”

Shares in the group slid 8%, putting the company’s market value at 973 billion yen ($8.6 billion), less than half its value in mid-December. Just under a decade ago, the firm was worth almost 5 trillion yen.

It also announced the first top-level departure since the nuclear problems were uncovered in December: chairman Shigenori Shiga, a former Westinghouse boss brought in to the top role last year after a $1.3 billion accounting scandal in 2015 shook up Toshiba‘s upper ranks.

Toshiba said it expected to book a 499.9 billion yen ($4.4 billion) net loss for the nine months to December, and a 390 billion yen net loss for the full year.

It also ended 2016 with negative shareholder equity due to the 712.5 billion yen nuclear writedown—a charge that was first flagged in December last year.

Toshiba said it would withdraw from nuclear plant construction overseas. Reuters reported this month that Toshiba was seeking at least a partial exit from ventures in Britain and India, a blow to both countries’ nuclear plans.

Wastinghouse Woes

In an earlier, separate statement, Toshiba outlined concerns at its Westinghouse business, the U.S. nuclear unit bought from the UK government a decade ago.

Internal reports, Toshiba said, suggested controls at Westinghouse had been “insufficient” and it needed to look into whether senior managers at Westinghouse exerted “inappropriate pressure” during discussions over a U.S. deal to buy the company at the heart of its cost overruns, it said.

“We judged that it would take about a month for external lawyers … to conduct these further probes and for the independent auditors to review the results,” Toshiba said.

A source briefed on the matter said Toshiba had not been able to immediately secure the approval of its auditor, PricewaterhouseCoopers Aarata. The source asked not to be identified because he is not allowed to talk the media.

PricewaterhouseCoopers Aarata declined to comment, citing client confidentiality. Toshiba declined to comment on the audit process

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